Spotlight

Indian equities are likely to remain cautious on Monday as investors look for follow-through buying after Friday’s sharp rebound to determine whether the recovery has sufficient momentum to extend beyond a short-term relief rally. The IT-led advance has improved near-term sentiment, but sustained buying will be crucial to establishing a firmer market direction. Persistent foreign institutional investor (FII) outflows remain a significant overhang, with overseas investors extending their selling streak to 11 consecutive sessions through Friday.

Crude oil and the rupee remain key macroeconomic pressure points. WTI crude is trading around $90–91 a barrel, while the rupee remains under pressure near 96.73 against the U.S. dollar. Elevated energy prices and currency weakness threaten to compound imported inflation and strain India’s external balances, adding to concerns following the Reserve Bank of India’s recent rate hike and shift toward calibrated tightening.

Developments in the Middle East, particularly diplomatic signals from the United States and Iran, could also influence market direction. Friday’s easing in crude prices offered some relief, but any setback in negotiations or renewed escalation could push energy prices higher and revive concerns over inflation and the rupee. A sustained moderation in oil prices would help ease these pressures, although the geopolitical outlook remains uncertain.

Asian markets are sending mixed signals, with South Korea’s KOSPI down more than 1% in early trade, while Japan’s Nikkei 225 is closed for a holiday. Against this backdrop, the near-term outlook for Indian equities remains cautious. The durability of Friday’s recovery will depend on continued buying interest, greater stability in crude prices and the rupee, and signs of moderation in foreign selling.

Technical View

Nifty 50

Nifty 50 continues to exhibit a weak technical structure, with the index trading below its key moving averages. The immediate resistance is placed at 22,600, followed by the 22,800–23,000 zone. A sustained move above 22,800 could extend the recovery towards 23,000, while a decisive breakout above this level would be essential to improve the short-term outlook.
 
On the downside, 22,400 remains the immediate support, followed by 22,200. A decisive break below 22,200 could intensify selling pressure and expose the index to further declines. Overall, the near-term outlook remains cautious, as the recent rebound requires sustained buying interest and stronger follow-through to signal a meaningful recovery.

Bank Nifty

Bank Nifty has moved above the 55,200 mark, signalling an improvement in near-term momentum. However, the index continues to trade below several key medium- and long-term moving averages, suggesting that the broader technical structure remains cautious. On the upside, 55,400–55,500 is the immediate resistance zone, followed by 55,800–56,000. A sustained breakout above these levels could further strengthen the recovery momentum.
 
On the downside, 55,000–54,800 remains the immediate support zone, followed by 54,500. A decisive break below 54,500 could undermine the ongoing recovery and expose the index to further downside. Overall, the near-term outlook is cautiously positive, although sustained buying and a decisive move above key resistance levels will be necessary to confirm a broader improvement in the trend.